The People's Record

Upcoming United States actions:

May 18th: ‘Operation Green Jobs’ March from Philadelphia to Washington, DC organized by the Poor People’s Economic and Human Rights Campaign.

May 18th to 23rd: the  Home Defenders League Week of Action against the banks and foreclosures in Washington, DC.

May 18th to 20th: there is a  weekend of protests against the closure of schools in Chicago.

May 22nd:  Stop the Frack Attack People’s Forum in Washington, DC.

May 25th: Protests against Monsanto everywhere

May 25th to June 3rd: March from Philadelphia to Harrisburg against prison spending.

June 1st:  Get on the Bus For Bradley Court Martial Trial  with buses leaving from Baltimore, MD, Washington DC, New York City and Willimantic, CT.

June 14th to 16th:  Trade Justice Action Camp in Bellingham, WA by the Backbone Campaign

June 24th to 29th: is the beginning of “ Fearless Summer” that starts “ an epic summer of actions.”

Source

Reblog with your own additions to the list.

Obama student loan policy reaping… wait for it… $51 billion profit
May 14, 2013

The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.

Figures made public Tuesday by the Congressional Budget Office show that the nonpartisan agency increased its 2013 fiscal year profit forecast for the Department of Education by 43 percent to $50.6 billion from its February estimate of $35.5 billion.

Exxon Mobil Corp., the nation’s most profitable company, reported $44.9 billion in net income last year. Apple Inc. recorded a $41.7 billion profit in its 2012 fiscal year, which ended in September, while Chevron Corp. reported $26.2 billion in earnings last year. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo reported a combined $51.9 billion in profit last year.

The estimated increase in the Education Department’s earnings from student borrowers and their families may cause a political firestorm in Washington, where members of Congress and Obama administration officials thus far have appeared content to allow students to line government coffers.

The Education Department has generated nearly $120 billion in profit off student borrowers over the last five fiscal years, budget documents show, thanks to record relative interest rates on loans as well as the agency’s aggressive efforts to collect defaulted debt. A spokesman from the Education Department did not respond to a request for comment. A Congressional Budget Office spokesman could not be reached for comment after normal business hours.

The new profit prediction comes as Washington policymakers increasingly focus on soaring student debt levels and the record relative interest rates that borrowers pay as a potential impediment to economic growth. Regulators and officials at agencies that include the Federal Reserve, Treasury Department, Consumer Financial Protection Bureau and Federal Reserve Bank of New York have all warned that student borrowing may dampen consumption, depress the economy, limit credit creation or pose a threat to financial stability.

At $1.1 trillion, student debt eclipses all other forms of household debt, except for home mortgages. It’s also the only kind of consumer debt that has increased since the onset of the financial crisis, according to the New York Fed. Officials in Washington are worried that overly indebted student borrowers are unable to save enough to purchase a home, take out loans for new cars, start a business or save enough for their retirement.

Policymakers also are worried about the effect that high interest rates on outstanding student debt may have on the broader economy. Congress sets interest rates on federal student loans, with rates fixed on the majority of loans at 6.8 and 7.9 percent.

But as the Federal Reserve attempts to lower borrowing costs for everyone from households and small businesses to large corporations and Wall Street banks, student borrowers have not been able to benefit.

Compared to a benchmark interest rate — what the U.S. government pays to borrow for 10 years — student borrowers have never paid more, increasing the burden of their student debt as wage increases and yields on investments and bank accounts fail to keep up with the relative increase in student loan interest payments.

President Barack Obama recently asked Congress to tie federal student loan interest rates to the U.S. government’s borrowing costs. In a possible sign of congressional intent, leading Democratic senators on Tuesday proposed legislation that would keep existing interest rates on some student loans for the neediest households fixed at 3.4 percent, rather than allowing them to revert back to their original 6.8 percent rate.

The legislation, dubbed the “Student Loan Affordability Act” and proposed by Senate Majority Leader Harry Reid (D-Nev.), Sen. Patty Murray (D-Wash.), Sen. Jack Reed (D-R.I.), and Sen. Tom Harkin (D-Iowa), aims to help a small subset of future student borrowers who take out loans over the next two years. The bill does nothing for existing student debtors.

“Today’s figures from the CBO underscore the urgent need for Congress to prevent the July 1 interest rate hike and address the crushing debt placed on students,” said Tiffany Edwards, spokeswoman for Democrats on the House Education and Workforce Committee.

Rohit Chopra, the Consumer Financial Protection Bureau official overseeing the regulator’s student debt efforts, has warned policymakers to not focus solely on future borrowers.

“The whole student loan problem is a problem that should be of deep concern to this body,” said Richard Cordray, CFPB director, during testimony last month before the Senate Banking Committee. “These are young people that we should care a great deal about.”

“They’re the ones with the ambition, aspirations and dreams, and they’re getting saddled with debt that they don’t understand,” Cordray said of student borrowers. “It’s holding them back and it’s making them unable to rise and succeed and become leaders in our society.”

He added: “It’s a significant problem and we’re going to be doing everything that we can to address it at the bureau.”

The CFPB has been focusing on helping existing borrowers refinance high-rate debt or modify the terms of their loans. In a report earlier this month, the CFPB lamented that borrowers are unable to refinance their obligations after they have graduated from college and secured well-paying jobs.

“Corporate entities, homeowners, and many others have been able to refinance debt at quite low rates, and student loan borrowers are wondering why they can’t do the same,” Chopra said.

The CFPB suggests that increased concentration in the student loan market may inhibit refinancings and debt workouts. Lenders and the Education Department profit when borrowers pay higher rates than they otherwise would in a normally-functioning market.

Unlike traditional lenders, though, the Education Department’s profits are barely dented by loan defaults. For loans made in 2013 that eventually default, the department estimates it will recover between 76 cents and 82 cents on the dollar. Bankruptcy rarely discharges student debt.

The Education Department’s collection efforts are aided by loan default specialists, including NCO Group Inc., a company owned by JPMorgan.

Source

April 16, 2013 - from my email:

Hey folks!

A Facebook friend of mine sent me this video and asked for my thoughts
April 16, 2013

My response was so long, I thought it a waste not to post here. Response starts below:

Well, you may not have known what you were getting yourself into when you asked for my thoughts cos I have a whole essay’s worth of thoughts – lol!:

On our financial system: our financial system for sure doesn’t make any sense – it is unstable and crisis is built into our capitalist system. Among other problems, competition & unsustainable growth are built into the system – there is no way our system can continue for very long without serious reforms or absolute fundamental change (which is really what needs to happen). Competition is great, but the problem with competition is that somebody eventually wins. And when they do, power & money & the ability to accumulate more of both concentrates in the hands of a few, driving the disparity, subverting regulation, and eventually leading to economic disaster.

I can imagine a few alternatives & solutions to this problem and I have in-mind what I believe would be the most possible/likely-to-succeed/least-bloody solution, but ultimately, I’ll jump on board to pretty much anything that answers the problems created by our capitalist system if it becomes popular enough & has strong enough of a possibility of success & doesn’t involve hurting lots of other people.

On RussiaToday as a news source: RussiaToday, like all large news providers (save for Democracy Now, if you want to count that), is biased toward the agenda of the powers they are beholden to. For us in the United States, that’s the corrupt corporate interests that govern our system.

For RussiaToday, that’s Russian state interests. They use real information & real facts, but often frame them in misleading or hyperbolic ways. Amidst major crises, they report facts early and incorrectly often. They feature U.S. stories predominately featuring violence, brutality, and crisis in the U.S. They intentionally try and foster negative feelings about the U.S. and give extensive coverage to news relevant both to the American left and to libertarian/Ron-Paul people – the two largest ‘dissident’ communities in the U.S. That’s their U.S. audience – people who could cause problems for U.S. state interests.

As part of that community, it’s a great & powerful resource. Lots of good information covered extensively about police brutality & our military-industrial-complex that doesn’t get that kind of coverage otherwise. At the same time, when they cite statistics or post stories about how the U.S. government is finally coming ‘for your guns’, I kind of just roll my eyes and tune them out and wait to see if I see it reported on DemocracyNow or TruthOut or SocialistWorker or AlJazeera (which has it’s own problems). So… I find them to be a good source for conglomerated news stories that a ‘dissident’ or a leftist might be interested in, but it’s always important to me, when reading RussiaToday, that I find other sources to confirm what is being reported.

Recommended related sources:

• Socialist Worker: A Tale of Two Economies

• Washington’s Blog: The Entire Economy is a Ponzi Scheme

• Business Insider: AMERICA TODAY: 3 Million Overlords And 300 Million Serfs

• Business Insider: Profits Just Hit Another All-Time High, Wages Just Hit Another All-Time Low

• NBC News: Surging student-loan debt is crushing the system

Sorry for the really long response!

-Robert

the-lone-pamphleteer.tumblr.com: Sundown in America
April 4, 2013

Rarely do journalists reporting on the state of the American or world economy write with the accessibility and honesty of David A. Stockman in his recent New York Times opinion piece, called “State-Wrecked: The Corruption of Capitalism in America.” The former Republican Congressman and Office of Management & Budget director during the Reagan administration has the experience with financial markets and central economic planning that most critics of the system lack, and it makes his column seem both more reliable and more frightening than the alarmist pleas of many other doomsday prophets.

With carefully explained figures and simplified (yet, to my knowledge, accurate) descriptions of the history of twentieth century American capitalism, Stockman takes us through the eras of mistaken governmental policies, avoiding the typical biases that pervade in financial opinion writing:

“The culprits are bipartisan, though you’d never guess that from the blather that passes for political discourse these days.”

Stockman’s willingness to criticize Republicans and Democrats alike is refreshing, as when he points to 1933 as the origin of our current “state-wreck,” when “when Franklin D. Roosevelt opted for fiat money (currency not fundamentally backed by gold), economic nationalism and capitalist cartels in agriculture and industry,” but then only a few paragraphs later emphasizes Richard Nixon’s “sin [arguably] graver than Watergate”: ending the convertibility of gold to the dollar, essentially defaulting on the nation’s debt obligations and launching a “four-decade spree during which we have lived high on the hog, running a cumulative $8 trillion current-account deficit.”

Many of his claims, though controversial, strike me as correct: World War II did more to end the depression than the New Deal; the only reason Alan Greenspan’s monetary policies—keeping interest rates too low for too long and flooding Wall Street with freshly minted cash—didn’t set off inflation was that domestic prices for goods and labor were crushed by the huge flow of imports from the factories of Asia; we’ve been living on borrowed time, spending Asia’s borrowed dimes; beginning under Reagan, and especially under Bush, the GOP basically “embraced Keynesianism—for the wealthy”; that the overblown fear of another Great Depression in 2008 was concocted by Wall Street to force a panicked bail-out from Washington; and—perhaps most frighteningly—that the 10-year deficit is actually $15 to $20 trillion—much larger than the $7 trillion that even “deficit hawks” like Paul Ryan would have us believe (Stockman explains that this disparity is partially made possible by the Congressional Budget Office’s projection of 16.4 million jobs over the next decade, compared with only 2.5 million in the last ten years).

I find myself convinced by Stockman’s column not only because of his seemingly accurate portrayal of the many mistakes made by government and industry alike, but also because he seems genuinely concerned with the stark and widening inequality created by the broken system. He sounds like Bernie Sanders when he says that Paul Ryan’s “proposal for draconian 30 percent cuts over a decade on the $7 trillion safety net—Medicaid, food stamps and the earned-income tax credit—is another front in the GOP’s war against the 99 percent.”

Like many critics of the harshly unequal outcomes of the supposed “recovery,” he invokes mind-boggling figures: real median family income growth has dropped 8 percent; the real net worth of the bottom 90 percent has dropped by 25 percent; the number of food stamp and disability aid recipients has more than doubled, to 59 million (which is one in five Americans).

In the 1980s Stockman was a true believer in Chicago School neoclassical economics and the trickle-down theory. Unlike most of his peers, however, he’s willing to look, 30 years later, at the disastrous outcomes and know how misguided that ideology was.

Stockman is no Kissinger, warning of the future of an empirical China in America’s image. Instead, he recognizes that just as America will soon follow Greece and Cypriot’s lead, the rest of the world won’t be far behind:

“The greatest construction boom in recorded history—China’s money dump on infrastructure over the last 15 years—is slowing. Brazil, India, Russia, Turkey, South Africa and all the other growing middle-income nations cannot make up for the shortfall in demand. The American machinery of monetary and fiscal stimulus has reached its limits. Japan is sinking into old-age bankruptcy and Europe into welfare-state senescence. The new rulers enthroned in Beijing last year know that after two decades of wild lending, speculation and building, even they will face a day of reckoning, too.”

He joins other pragmatic truth-tellers, like former Comptroller General David Walker, in calling for drastic reforms, but is more than pessimistic about the potential to realize them, writing that “the way out would be so radical it can’t happen.” I disagree with Stockman on what appears to be a faith in truly free and functioning markets that could save the global economy while decreasing inequality—especially because he doesn’t address how constant growth could be compatible with an ecologically sustainable future—but I am willing to concede that many of his measures would be improvements over the status quo. I also agree that they’re completely unfeasible as a matter of politics.

So what are we left with? How do we proceed? Is there any way to stop this latest bubble, “inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains,” from bursting and leaving us in ruins? I don’t know, but Stockman’s closing line leaves me with chills: “If this sounds like advice to get out of the markets and hide out in cash, it is.”

— Written & submitted by the-lone-pamphleteer.tumblr.com whom you should follow.

Please send your own original content for review & publishing on The People’s Record at thepeoplesrec@gmail.com & feel free to write us with any ideas for regular columns, podcasts, cartoons/comics or similar such content.

Or if you’re interested in helping us curate & post regular international protest news content from other sources (we’ll have to trust you first cos of passwords, etc) for The People’s Record on our Facebook page, our Twitter account, our Tumblr, Instagram or other sites that you think we should be on, let us know so we can get that process started.

Richard Wolff comes back to PBS’ Bill Moyers for Part II
March 23, 2013

Richard Wolff on Cypress:

Absolutely! That Cypress story is extremely important.

Even though it’s a very small country and people might not pay attention because it’s so small. Here is the austerity program of raising taxes and cutting government spending, taking a qualitative new step: to help bail out a capitalism that hasn’t worked in Europe and that has crippled this little country of Cypress. The step taken to try and fix the problem is to literally reach into the private insured bank accounts of people in the local banks in Cypress and take money out of it to pay for fixing this broken system.

For all working people, not just in Europe in the United States and the rest of the world too, this should be a wakeup call if you still need one.

We’re in a situation where the most dire, unexpected, unimaginable steps are being taken to fix (capitalism) a system that keeps resisting being fixed so that we are required now to dip into people’s checking accounts and literally TAKE the money.

Q: Student loan debts are overwhelming me and many others. What does Professor Wolff think would happen to the economy if those debts could be forgiven under personal bankruptcy? Is that even possible?

Well the law in the United States specifically prevents you from using bankruptcy to erase your student loans. Bankruptcy does allow you to erase other kinds of debts but the student loan system was set up to prevent that – so students are in an especially bad place by virtue of this.

In our history as a country, we’ve never before done this. We’ve never required college students to take anything remotely like this kind of debt. We’re requiring students to acquire HUGE amounts of debt just to get bachelor’s degrees, let alone more advanced degrees at the same time that we offer the graduates the poorest job market & prospects in a generation. That’s a one, two punch. You have to borrow more than you can afford to face a job that will not allow you to ever pay it off. Hence this person’s very intelligent question – how is this going to work?

We’ve solved a problem in our society – how to educate the next generation – and let me tell you this is a very important matter. We economists believe that the single most important factor shaping the future of any economy in the world, including the United States, is the quality and quantity of the educated, trained labor force that it produces. Colleges and Universities are where we do that. But if we’re crippling an entire generation with debts they cannot support and jobs that will not encourage them to continue in their studies, we are as a nation, shooting ourselves in the foot going forward. It’s a demonstration of the dysfunctionality of our system.

And then the question comes, could we forgive our student’s debts? Well, it’s an interesting idea. But how do you go to the people who can’t afford their credit card debts or their mortgage debts, they’re all hurting. And the students have a special claim – I acknowledge that. We need those students – I understand it. But we have to go to the root of a society that allows unspeakable wealth to accumulate in the hands of a tiny minority, while condemning an entire generation of students to a set of burdens. We don’t want them to have those burdens; we need what they can produce for our society.

Moyers: But what does this young woman do who says that she is overwhelmed by her debt?

Many students are not aware that they actually have some ways to help them.

But the more broad answer is that you need a social movement. If there were masses of students saying “this is intolerable,” saying it loudly and saying it publicly – peacefully for sure, but making it clear…then the powers that be would begin to realize that there are millions of students (upward of 15-16 million people going to colleges & universities in the United States). You’re talking about a well-educated constituency that, if they were organized and mobilized, you would begin to get the response of dealing with their crisis more effectively than what we have now. 

Watch the video of the entire Part II interview here.

Read more about Wolff’s organization to combat capitalism here.  

Follow that organization on Tumblr here.

The sickening cost of health care: Why Americans pay the highest health care costs in the world
March 18, 2013

Health care costs in the United States continue to skyrocket, with dire consequences ranging from personal bankruptcies to the growing national debt. Yet the even more outrageous fact is that these inflated costs—the highest in the world—produce health outcomes that trail countries which spend far less.

In a Time magazine special report titled “Bitter Pill: Why Medical Bills Are Killing Us,” published in February, investigative journalist Steven Brill pulls back the curtain to expose the price-gouging and profiteering that explains why health care in the U.S. costs so much.

Brill’s article details the devastating impact that health care costs—which are behind six in 10 personal bankruptcies—have on working-class people. As Time managing editor Richard Stengel pointed out, Brill “inverts the standard question of who should pay for health care and asks instead: Why are we paying so much?”

Barack Obama used the urgency of this crisis to press Congress to pass his health care law. But the Patient Protection and Affordable Care Act does little to address rising health care costs.

On the contrary, it will almost certainly make things worse by requiring the uninsured to get coverage from for-profit companies and providing subsidies from taxpayer revenues to pay the premiums. Rather than challenging industry giants, Brill writes, “Obamacare enriches them. That, of course, is why the bill was able to get through Congress.”

Meanwhile, outsized health care costs—which continue to rise faster than inflation—are a central reason for big government deficits, which the very same politicians then use as a pretext to push for cuts in “entitlement” programs like Social Security and Medicare, by reducing payments for the former and raising the eligibility age for the latter.

However, as Brill points out, Medicare, the government’s universal health care system for the elderly, is one of the few bright spots in the current system. Whatever its flaws, caused by cuts and restrictions over the past few decades, it is still far more efficient than private insurance, it offers universal coverage while even Obama’s health care law will leave tens of millions of people uninsured—and it has mechanisms to keep costs down.

If Medicare, instead of being cut, was expanded to cover everyone and to provide even better care than it does now, it would save about $380 billion per year by cutting down on administrative waste, according to a study published in the New England Journal of Medicine—and on top of that, it would actually improve health care.

Over ten years, that’s just about the same amount—$4 trillion—that Barack Obama’s deficit reduction commission proposes to save, with massive cuts to entitlement programs that dwarf proposed increases in taxes.

It’s true that government spending on Medicare has been rising much faster than inflation and is a major cause of government deficits. Medicare spending, after adjusting for inflation, increased fivefold from $110.2 billion in 1990 to $554.3 billion in 2011,according to the Centers for Medicare & Medicaid Services (CMS). And that was after it nearly tripled in 10 years from $37.4 billion in 1980.

In fact, according to Congressional Budget Office figures, protected increases in health care costs are behind most of the expected growth in government debt.

While a significant part of this increase is the result of a growing and aging population, much of the increase in Medicare spending is being driven by increased health care costs overall. The CMS reports that total per capita health care spending in the U.S., adjusted for inflation, more than tripled from $2,854 in 1990 to $8,680 in 2011. Health care accounts for nearly one-fifth of the GDP in the U.S..

Other advanced industrial countries such as Germany have a significantly higher percentage of their populations over age 65. Yet they spend much less on health care than the U.S.—and achieve better outcomes.

In “Bitter Pill,” Brill examines hospital bills to expose how extreme price inflation generates massive hospital industry profits, while driving health care costs sky-high—a price that is ultimately paid by consumers.

According to Brill, hospitals charge patients different amounts for the same equipment and procedures, depending on what kind of insurance they have. While Medicare and Medicaid pay a set amount for each item, various insurers negotiate the rates they pay. Many insurers negotiate a discount off the “chargemaster”—a hospital’s list of charges for everything from aspirin and gauze to major procedures and cancer drugs that cost tens of thousands of dollars each.

Because hospitals use the chargemaster as a starting point in negotiations, these prices are much higher than the items actually cost. To cite one example, Brill points out a hospital that charges $24 for a niacin pill which costs about 5 cents in an ordinary pharmacy: a markup of 47,900 percent.

Hospitals also gouge patients by charging multiple times for the same procedure. In the article, Brill quotes Patricia Palmer, who is paid to negotiate with hospitals on behalf of patients to lower exorbitant bills:

First, they charge more than $2,000 a day for the ICU, because it’s an ICU and it has all this special equipment and personnel. Then they charge $1,000 for some kit used in the ICU to give someone a transfusion or oxygen…And then they charge $50 or $100 for each tool or bandage or whatever that there is in the kit. That’s triple billing.

For the un- or underinsured, tragic illnesses can be a financial catastrophe. The terminally ill can even be forced into an impossible choice: whether to extend their lives and leave their families with a crippling debt, or give up time with their families to avoid burdening them financially.

This was the choice faced by Steven D., who Brill profiles in his article. After being diagnosed with terminal cancer, Steven’s wife Alice, who earns about $40,000 a year, racked up over $900,000 in debt to pay for treatment to keep her husband alive for an extra 11 months. Although Alice was able to get Medi-Cal (Medicaid) coverage and hired an advocate to negotiate with the hospital, she still ended up owing $142,000, more than three times her yearly salary. Not only did she have to cope with losing her husband, but she was left financially crippled as well.

When pressed by Brill, hospital administrators weren’t able to give a plausible explanation for the chargemaster rates, except to say that they are only a starting point and patients aren’t actually expected to pay them. The grim irony is that it is the uninsured patients—those among the least likely to be able to afford it—who are charged full chargemaster prices. And many don’t know negotiation is an option.

Full article

Possibility of empowered left amid populist upswing in Italian elections
February 25, 2013

Italians voted for a second and final day in a general election on Monday with a surge in protest votes increasing the risk of an unstable outcome that could undermine Europe’s efforts to end its three-year debt crisis.

Opinion polls give the centre-left coalition led by former Industry Minister Pier Luigi Bersani a narrow lead but the race has been thrown wide open by the prospect of protest votes against austerity and corporate and political scandals.

“I’m sick of the scandals and the stealing,” said Paolo Gentile, a 49-year-old Rome lawyer who said he had voted for the 5-Star Movement, an anti-establishment protest group set to make a huge impact at its first general election.

“We need some young, new people in parliament, not the old parties that are totally discredited,” he said.

Most of the voters interviewed outside polling stations by Reuters on Sunday and Monday expected the next government would quickly collapse, thwarting efforts to end an economic crisis.

“I’m very pessimistic, I don’t think that whoever wins will last long or be able to solve the problems of this country,” said Cristiano Reale, a 43 year-old salesman in Palermo, Sicily. He said he would vote for the far left Civil Revolution group.

A bitter campaign, fought largely over economic issues, has been closely watched by financial markets, nervous about the return of the kind of debt crisis that took the whole euro zone close to disaster and brought technocrat prime minister Mario Monti to office in 2011.

ANTI-EURO FORCES

“There are similarities between the Italian elections and last year’s ones in Greece, in that pro-euro parties are losing ground in favor of populist forces,” said Mizuho chief economist Riccardo Barbieri.

“An angry and confused public opinion does not see the benefits of fiscal austerity and does not trust established political parties.”

(TPR NOTE: That’s because the only people who benefit from austerity are the rich. It’s one more way the rich are able to siphen money from the poor, creating wide-spread poverty and chaos, while collecting marginally higher numbers for themselves, which will never have an effect on their quality of life because they are already so rich that it doesn’t matter.)

Projections based on the vote count will be issued through the afternoon and the final result should be known late on Monday or early Tuesday.

An extremely close Senate race is expected in several battleground regions and this could delay the final result..

The election result is likely to be the most fragmented in decades, with the old left-right division disrupted by the rise of 5-Star, led by fiery Genoese comic Beppe Grillo, and by Monti’s decision to run at the head of a centrist bloc.

“It will be a vote of protest, maybe of revolt,” said Corriere della Sera, Italy’s largest newspaper, on Monday.

It noted that for the first time the winning coalition is unlikely to get more than a third of the votes, making it harder to govern and likely opening weeks of complicated negotiations.

It is unclear how Grillo’s rise will influence the result, with some pollsters saying it increases the chances of a clear win for the centre-left, led by Bersani’s Democratic Party (PD), because 5-Star is taking votes mainly from Berlusconi.

After the first day of voting on Sunday, about 54 percent of voters had cast their ballots, a sharp fall on the level of 62.5 percent seen at the same stage in the last election in 2008.

If the trend continues on Monday it will confirm the disillusion of voters with a discredited political class.

CALL TO ARMS

The 5-Star Movement, backed by a frustrated younger generation increasingly shut out of full-time jobs, could challenge former premier Silvio Berlusconi’s People of Freedom (PDL) party as Italy’s second largest political force.

“Come on, it isn’t over yet,” was Monday’s front page headline in Il Giornale daily, owned by Berlusconi’s brother, a call to arms to get out the vote.

The 76-year-old Berlusconi, has pledged sweeping tax cuts and echoed Grillo’s attacks on Monti, Germany and the euro in an extraordinary media blitz that has halved the lead of the centre-left since the start of the year.

Support for Monti’s centrist coalition meanwhile has faded after he led a lackluster campaign and he appears set to trail well behind the main parties.

After drawing hundreds of thousands of supporters to its final campaign rally on Friday, Grillo has said he fears voting fraud to try to block a massive breakthrough, telling his supporters to wet the lead in the pencils they use to vote to prevent the crosses being rubbed out.

Whatever government emerges will inherit an economy that has been stagnant for much of the past two decades and problems ranging from record youth unemployment to a dysfunctional justice system and a bloated public sector.

If Bersani wins, it is far from clear that he will be able to control both houses of parliament and form a stable government capable of lasting a full five-year term.

Source

Hey comrades,

Recently, a campaign to target Sallie Mae’s central, detrimental role in the student debt crisis has began to build great traction. Conversations have been sparked amongst various collectives and organizations as to how everyone can participate to effectively target Sallie Mae and how together, this can be an avenue to make strong demands and envision alternatives on fundamental issues like free public higher education, racial justice, and equal access to education for immigrants.

Organizers at Jobs with Justice and Student Labor Action Project have already begun to coordinate efforts against the already beleaguered corporation by organizing workers in Sallie Mae call centers, to pressuring the Consumer Financial Protection Bureau for tougher regulation to pursuing legal recourse for Sallie Mae’s redlining practices.

Here in New York, folks from New York Students Rising, Strike Debt, Occupy Student Debt Campaign, and All in the Red have been discussing what it would look like to continue to focus on Sallie Mae together in the context of building a broad-based coalition.  

We’d like to open up the discussion to organizers and activists across New York City (there will be a national call following this) to unpack what this could look like locally and nationally in the coming months. Please send this to anyone in and around NYC who may be interested and indicate your availability on this Doodle if you’d like be a part of the call: http://www.doodle.com/8tz3w6nwc7a63xvd

Best, Matt Tinker, (479-366-8609) #allinthered

Janna Powell (484-695-1204) #allinthered

Student-loan delinquency skyrocketing, hitting “Danger Zone”
January 31, 2013

Most of us are have seen headlines about the burgeoning student-loan crisis. As of August, for instance, student loans had topped $914 billion — an increase of $10 billion in less than half a year, even as most debt was falling around the country. Still, we do not appear to have hit rock-bottom. A new report shows that student-loan delinquency rates have gone through the roof in recent years and that, even more troubling, we may be entering a “danger zone” in which the entire U.S. economy is at risk.

The report from FICO Labs shows that student-loan delinquencies saw a 22-percent increase in the past several years; the overall delinquency rate is now more than 15 percent.

The LA Times has more:

The worsening deliquency rate comes as loan balances surge. The average student-loan debt jumped to $27,253 last year, up 58% from $17,233 in 2005. By contrast, average credit-card and auto-loan balances declined during that period.

“As more people default on their student loans, their credit ratings will drop, making it harder for them to access new credit and help grow the economy,” [FICO Labs head Andrew] Jennings said. “Even people who stay current on their student loans are dealing with very large debts, which reduces the money they have available to spend elsewhere.”

Source

Strike Debt has created a Debt Resistor’s Manual that you can read here.

It’s side project, Rolling Jubilee, has raised $552,682 to abolish $11,058,465 in debt.

For the first time in the history of the United States, the delinquency rate on student loans is higher than the rate of all other consumer loans, including credit and car loans. According to the latest data from the New York Federal Reserve, total student loan debt stands at $956 billion.
January 21, 2013 

A new infographic from CollegeStats.org puts the U.S. student loan dilemma into perspective.

In November, the Fed’s Quarterly Report on Household Debt and Credit showed a “red flag” and that there was a growing problem because 11 percent of student loans were 90 days or more past due. The infographic showed that the delinquency rate rose by about five percent since 2005.

Most borrowers are under the age of 30, but for the past eight years, the number of Americans over the age of 30 attending school has been steadily rising (the research did not show the demographics of student loan debt or the default rate).

Since 2005, student loan debt has been exceeding credit card, auto loan and other consumer debt. The average student loan balance (2012) has surpassed the $20,000 mark, but with the delinquency rate rising there are ramifications for the borrowers: the federal government can garnish up to 15 percent of an individual’s income and Social Security disability and retirement income, collection charges of up to 20 percent can add an additional nine years to a 10-year loan and it will hurt the borrower’s credit score. 

A new survey by Financial Fit showed that 25 percent of parents say they have not factored college affordability into their search for getting their child into a college or university. The study also found that 46 percent are unsure how much debt their child is willing to take on and more than one-third are unsure how much debt they are willing to commit to.

An overwhelming majority of respondents said they would be willing to sell a car, get a second job or increase their debt so their child can attend a post-secondary institution, even though the enormous tuition rate is too expensive.

“Families are told ‘don’t look at the sticker price—it’s not real,’ and they believe it because it’s true,” said Frank Palmasani , a veteran guidance counselor and former college admissions director, creator of the Financial Fit™ program, in a press release.  “But that doesn’t necessarily mean that a school is going to be affordable. Under a blanket of false security, students spend junior and early senior year selecting colleges, testing, and applying, all the while falling more and more in love with their top pick, which may well be unaffordable.”

Early last year, Moody’s economist Cristian deRitis warned that student loan debt defaults could lead to a wave of credit downgrades in the future across the country and this could hurt households from accessing credit for things like a home or an automobile.

Since 1978, the cost of college tuition in the U.S. has soared by 900 percent.

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Austerity disaster: Sandy victims thrown to lending sharks, privatized relief
January 8, 2013

In a shameless display of putting politics before human needs, Congress began 2013 still  scrapping over a $60 billion Hurricane Sandy relief bill fully nine weeks after the disaster hit. And if the Katrina experience is any indication, the bill may not bring adequate relief to struggling and displaced homeowners even when it is finally passed.

The damage wrought by Sandy to New York and New Jersey coastal areas was similar in scale  to that to New Orleans from Hurricane Katrina in 2005. Just two weeks after Katrina hit, Congress approved $62.3 billion in emergency appropriations, along with numerous subsequent emergency funding requests to cover the damages, which topped $100 billion. Yet as noted on the Occupy Sandy Facebook page, federal relief funds post-Katrina were gutted in favor of “privatizing and outsourcing relief, making room for predatory lenders, disaster capitalists, and gentrification developers.”

According to a report by Strike Debt, the vast majority of FEMA’s resources and efforts are spent on public assistance programs that provide infrastructure restoration. Individual victims of disaster are for the most part just offered personal loans – loans that have many features of predatory subprime lending.

Disaster victims are now being expected to shoulder relief expenses that used to be shared publicly. Most people believe they are covered by their insurance policies or by the Federal Emergency Management Agency (FEMA), but many disaster victims have found that their insurance policies include obscure provisions that exclude coverage, and the only aid that FEMA gives to individuals is the opportunity to take on more debt.

It is a failing of our austerity-strapped federal disaster relief system that it can offer little real help to individuals; and it is a failing of our private, for-profit insurance system that the legal duty of management is to extort as much money as possible from customers while returning as little as possible to them, in order to maximize shareholder profits.

Most Sany Victim Are Left Stranded

The report by Strike Debt was based on observations made at a community meeting in Midland Beach, Staten Island, on November 18, 2012, as well as on interviews with FEMA and Small Business Association (SBA) representatives, volunteer workers, local business owners, and residents throughout New York City. According to the report, there are three main sources of financial support being offered to Sandy victims: insurance, grants, and loans. Federal support is available only once private insurance has been exhausted.

For federal aid programs:

* Victims are required to first apply for loans before qualifying to apply for FEMA aid, placing the economic cost of the disaster on the individual victim.

*  Aid programs favor those who can take on debt, further exacerbating pre-existing inequalities among residents.

*  Federal programs are inflexible and fail to meet even basic individual and community needs.

*  Relief options are not clearly communicated or well understood. Policies are so complex that even lawyers are confused.

Except for temporary living costs, FEMA grants are accessible only after the homeowner, renter or business applies for an SBA loan.  If the applicant qualifies for a loan, he or she is not likely to be provided further FEMA aid. Disaster loans are made through FEMA on the basis of credit history, and favorable interest rates are available only if the applicant cannot get credit elsewhere. That means favorable interest rates are offered only if an applicant cannot qualify for credit through a commercial bank.  When the banks got in trouble themselves, the Fed dropped the Fed funds rate (the rate at which they borrow from each other) to nearly zero.  But no such relief is extended to disaster victims.

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‘An economic time bomb’: The world’s unemployed youth
December 19, 2012

Akmal Dildorbek is a 23-year-old university graduate in the Tajik capital, Dushanbe. The former computer-science major remains unemployed, as do most of those who graduated with him two years ago. As he tells it, soon the only prospect he’ll have is to leave home to join the flow of unemployed Central Asians seeking underpaid jobs in Russia.

“I’m jobless and living at home [with my parents],” Dildorbek tells RFE/RL. “I’m a computer programmer by [education] and I’ve applied for a job every place that needs a computer programmer. I’ve applied for jobs at banks, companies, and private firms. I’ll continue to search for a job. If I can’t find anything, I’ll have to go Moscow to become a migrant laborer.”

Dildorbek is one of an increasing number of young adults who are losing hope in a heavily globalized economy that has yet to shake off the effects of the financial crisis.

Suffering Disproportionately

There are warnings of a “lost generation” of young workers facing a potentially explosive mix of growing inactivity and precarious work in the industrialized world, along with high working poverty in developing countries.

According to the United Nations’ International Labor Organization (ILO), more than 75 million people around the world between the ages of 15 and 24 are now without work — an increase of nearly 4 million since the global financial crisis began in 2007. More than 6 million of them have given up on finding a job.

The difficulties that young people are facing reflect the weak state of labor markets. But Matthieu Cognac, a youth employment specialist with the ILO in Bangkok, tells RFE/RL that young people in particular are being left behind, since they’re three times more likely to be unemployed than their elders.

“Young people are the ones who suffer more than others from discrimination,” Cognac says. “In times of economic growth, they are usually the last in or the last hired. However, in times of crisis, they are also the first ones to be fired or they are the first out.”

‘Working Poverty’

In the European Union, one in five people under 25 willing to work cannot find a job. Many more young people are being pushed into part-time work contracts or into the informal economy. Unemployment is particularly acute in Spain and Greece, where half of high school and college graduates ready to work are coming up empty-handed.

Prospects for work also remain dim in swaths of the Asia-Pacific region, home to the world’s largest youth population. One-in-6 young people is unemployed in Taiwan and the Philippines, while the ratio is 1-in-5 in Indonesia. The worst-off region is the Middle East and North Africa, where approximately 1-in-4 young people is without a job.

However, Cognac says that working poverty continues to be the main challenge facing the developing world.

“The key focus in Europe is job creation,” Cognac says. “There are not enough jobs out there. The key focus in developing Asia is also creating jobs, but it is really a focus on the quality of those jobs because of the lack of social protection and the lack of social safety nets. Young people simply do not have any other option than to work in conditions of working poverty.”

More Trouble Ahead

With some 40 million young people entering the workforce every year, labor-market experts and company bosses say the world is sitting on an economic and social time bomb.

Untapped youth potential is especially crucial in countries where the population is aging. In such places, a trend of fewer working young people translates into lower tax revenues to meet ballooning social costs. Those unemployed for a long time are less employable and earn less throughout their working lives.

The Organization for Economic Cooperation and Development (OECD) says long-term unemployment is associated with “elevated risks of poverty, ill health, and school failure for the children of the affected workers.”

Growing resentment and mistrust among young people can also foster social unrest. That was the case in the wave of Arab Spring protests that swept across North Africa and the Middle East in early 2011. More recently, severe austerity measures coupled with slow economic growth have fomented unrest in Southern Europe.

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The insufferable human drama of evictions in Spain
December 14, 2012

With 500 families being evicted in Spain every day, foreclosures have become a source of great suffering. But luckily, there are still those who resist.

Throughout this crisis, there has always been a certain alienating quality to the pronouncements of European leaders and technocrats. Sometimes one is led to wonder if these people are actually talking about the same continent — or the same universe, for that matter. Just today, for instance, the European Central Bank announced that “the eurozone is starting to heal.” Indeed, the major weakness the central bankers could detect from the commanding heights of their glass-and-steel tower in downtown Frankfurt was “falling bank profits.”

But this morning, huddled together with activists and independent journalists in a small apartment in Madrid, the eurozone seemed to be far from healing. Together with Santiago Carrión from the Associated Whistleblowing Press, we were there because the Platform for those Affected by their Mortgage (PAH), which runs the Stop Desahucios (Stop Evictions) campaign, had called on the city’s indignados to protect Juana Madrid and her two daughters of 21 and 17, who were about to be evicted from their humble home in the poor neighborhood of Orcasur. The atmosphere, of course, was tense.

The living room was full of people, most of them photographers, while outside the first chants of activists could be heard as people prepared to physically block the entrance to the apartment. Nervously dragging on her cigarette, Juana’s baggy and dark-ringed eyes said it all: this was a woman on the verge of a breakdown. Her voice was calm and subdued, but her facial expression exuded despair. “We have nowhere to go,” Juana’s 21-year-old daughter Isa told us in the kitchen. “If they evict us today we will end up on the street tonight.”

Sadly, the story of Juana and her daughters is by no means an exception. Ever since the start of the crisis in late 2008, over 350.000 families have been evicted from their homes. According to government figures, Spain currently faces a staggering wave of 500 evictions per day — 150 of them in Madrid alone. The vast majority of these involve families whose main breadwinner lost his or her job in the recession and who have inadvertently fallen behind on their mortgage payments to the bank. At 25.02%, Spain’s unemployment rate is the highest in the developed world, higher even than in the U.S. at the peak of the Great Depression.

Recent months have seen a wave of high-profile suicides by people who were about to be evicted from their homes. The most paradigmatic case was that of a 53-year-old woman in the Basque Country, who jumped from her balcony and plunged to death as foreclosure agents made their way up the stairs of her apartment. The Wall Street Journal, meanwhile, tells the harrowing story of a Spanish locksmith who was taken aback when he pried open the door of a foreclosed apartment for police, and encountered a woman giving birth inside. According to the locksmith, it was “evident that the stress of the foreclosure had induced premature birth.”

Since then, a number of high judges have spoken out against the “inhumane” foreclosure laws in Spain, which they consider to be “overly protective of the politically influential banks”. Under immense media pressure, the conservative government finally passed an emergency law allowing the most vulnerable families to be spared from eviction. Still, the new law will only cover some 120.000 people and does not tackle the root of the problem, which is the fact that the government keeps squeezing workers, students, homeowners, pensioners and the sick and disabled in order to pay for the folly of a tiny elite of gambling bankers.

The human tragedy, after all, is only part of the story. The other part, as the Spanish indignados rightly point out, is the estafa: the fraud. Many of the mortgages that now shackle millions of families to unpayable debt loads, came about under highly dubious circumstances to begin with. The banks never cared if people would be able to repay their debts: as long as house prices kept rising, a defaulting family could still be evicted and replaced by another. After the bank reclaimed the property, it could just re-sell it at a profit. The fact that lives are being destroyed and families shattered in the process is wholly irrelevant for the financial imperatives of the bank.

And thus, the people end up paying the banks triple: first through the usurious interest rates they pay on their mortgage loans (which are essentially conjured up out of thin air by the banks); second through the tax-payer-funded bailouts of the same banks, after many of these mortgages started going bad; and third through the homes they are losing and which subsequently fall back into the property of the bank, which can — a few years down the line, when real estate prices will have recovered somewhat — sell on the property to a third party.

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Jailed for $280: The return of Debtor’s Prisons
December 10, 2012

How did breast cancer survivor Lisa Lindsay end up behind bars? She didn’t pay a medical bill — one the Herrin, Ill., teaching assistant was told she didn’t owe. “She got a $280 medical bill in error and was told she didn’t have to pay it,” The Associated Press reports. “But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs.”

Although the U.S. abolished debtors’ prisons in the 1830s, more than a third of U.S. states allow the police to haul people in who don’t pay all manner of debts, from bills for health care services to credit card and auto loans. In parts of Illinois, debt collectors commonly use publicly funded courts, sheriff’s deputies, and country jails to pressure people who owe even small amounts to pay up, according to the AP.

Under the law, debtors aren’t arrested for nonpayment, but rather for failing to respond to court hearings, pay legal fines, or otherwise showing “contempt of court” in connection with a creditor lawsuit. That loophole has lawmakers in the Illinois House of Representatives concerned enough to pass a bill in March that would make it illegal to send residents of the state to jail if they can’t pay a debt. The measure awaits action in the senate.

“Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month,” Illinois Attorney General Lisa Madigan said last month in a statement voicing support for the legislation. “Too many people have been thrown in jail simply because they’re too poor to pay their debts. We cannot allow these illegal abuses to continue.”

Debt collectors typically avoid filing suit against debtors, a representative with the Illinois Collectors Association tells the AP. “A consumer that has been arrested or jailed can’t pay a debt. We want to work with consumers to resolve issues,” he said.

Yet Illinois isn’t the only state where residents get locked up for owing money. A 2010 report by theAmerican Civil Liberties Union that focused on only five states — Georgia, Louisiana, Michigan, Ohio, and Washington — found that people were being jailed at “increasingly alarming rates” over legal debts. Cases ranged from a woman who was arrested four separate times for failing to pay $251 in fines and court costs related to a fourth-degree misdemeanor conviction, to a mentally ill juvenile jailed by a judge over a previous conviction for stealing school supplies.

According to the ACLU: “The sad truth is that debtors’ prisons are flourishing today, more than two decades after the Supreme Court prohibited imprisoning those who are too poor to pay their legal debts. In this era of shrinking budgets, state and local governments have turned aggressively to using the threat and reality of imprisonment to squeeze revenue out of the poorest defendants who appear in their courts.”

Some states also apply “poverty penalties,” including late fees, payment plan fees, and interest when people are unable to pay all their debts at once, according to a report by the New York University’s Brennan Center for Justice. Alabama charges a 30 percent collection fee, for instance, while Florida allows private debt collectors to add a 40 percent surcharge on the original debt. Some Florida counties also use so-called collection courts, where debtors can be jailed but have no right to a public defender.

“Many states are imposing new and often onerous ‘user fees’ on individuals with criminal convictions,” the authors of the Brennan Center report wrote. “Yet far from being easy money, these fees impose severe — and often hidden — costs on communities, taxpayers, and indigent people convicted of crimes. They create new paths to prison for those unable to pay their debts and make it harder to find employment and housing as well to meet child-support obligations.”

Such practices, heightened in recent years by the effects of the recession, amount to criminalizing poverty, say critics in urging federal authorities to intervene. “More people are unemployed, more people are struggling financially, and more creditors are trying to get their debt paid,” Madigan told the AP.

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